BlackRock’s CIO Admits That Bitcoin And Crypto Are Durable Assets• June 20, 2022 3:49 pm • Comments
Blackrock’s chief investment officer Rick Rieder just shared his current views of the crypto industry which continues to support a bullish outlook in general.
Rieder states that Bitcoin and crypto are considered durable assets and that the current market dip would be a very healthy recalibration for the market in the long term.
There were also questions that were asked about his thoughts on the Federal Reserve increasing rates and how the market will ultimately react to that.
In response to that, he stated that there was likely a lot of overleverage being used in the markets already due to the rates being low for such a long period of time.
This period of time would likely help remove all of that overleverage as a result of all the years of low rates.
❗️Rick Reader, Chief Investment Officer of BlackRock, admits that bitcoin is a long-term asset despite the crisis.
— Alt Crypto Gems (@AltCryptoGems) June 17, 2022
The CIO explained: “I think people underestimate. When you leave rates at such low levels for such an extensive period of time … when you keep policy too easy, the leverage builds in the system slash ‘how do I capture return quickly’ — and you are seeing a lot of the leverage that was built up around crypto come unglued pretty darn quickly.”
However, he emphasized:
I still think bitcoin and crypto are durable assets. It’s a durable business, but there was so much excess built around it.
Rieder described: “It’s not terribly dissimilar from the internet bubble … if you go back to the ’99 and 2000, was the internet a bad idea? No, it wasn’t a bad idea.
But you created so much excess around it and you just have to de-gear that dynamic, and I think we are seeing that today.” He noted: “Markets go down five times faster than they go up … That’s why you were seeing this incredible unwind.”
With that being said, durable assets are assets that will likely stand against the test of time and will ultimately continue to grow in the long term.
This is not the first time that BlackRock has gotten involved in the industry as the firm first started to get into it due to overwhelming demand from its clients.
The firm is currently the world’s largest asset manager with over $10 trillion in assets under management which means that its positive perspective on crypto will indicate that we are still in the early stages of crypto.
The asset class is also growing in popularity among intuitional investors as many other asset classes are facing pressure now due to economic uncertainty and inflation fears.
.@BlackRock Global Fixed Income CIO @RickRieder on crypto: “It’s a durable business, but there’s so much excess built around it… It's not terribly dissimilar from the internet bubble… You have to de-gear that dynamic and I think we're seeing that today.” pic.twitter.com/FnSIi4aOL4
— Yahoo Finance (@YahooFinance) June 16, 2022
My feeling is like a lot of assets, if you look two or three years from now they will be higher than today.
“But it could overshoot on the downside. It’s hard to understand, just like gold, because I can’t understand my free cash flow multiple and what my security is under it,” he concluded.
Rieder has made pro-bitcoin comments in the past. In November 2020, he said cryptocurrency was here to stay, noting that bitcoin could replace gold.
He also said that BTC is “so much more functional than passing a gold bar.” In September last year, he revealed that he had “a small piece of bitcoin,” noting, “I like volatile assets that have upward convexity. I could see bitcoin rising significantly.
Blackrock, the world’s largest asset manager, says #Bitcoin and crypto are durable assets
They've also attended #DASNYC 2021.
Take part in crypto's institutional adoption:https://t.co/4Eo0VFAMuq
— Digital Asset Summit (@BlockworksDAS) June 20, 2022
Join the conversation!
We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.